I bought my first house last year and now I have mortgage interest and property taxes to deduct. I've always used free tax software in the past, but I'm worried the basic free versions won't handle homeowner deductions properly.
I'm looking for the best free tax software for homeowners that can walk me through itemized deductions if that makes sense for my situation. My income is around $65k, so I'm right on the edge of whether itemizing makes sense versus taking the standard deduction.
Do any of the free tax software options have good guidance for homeowners? I don't want to miss out on deductions just because I'm using free software.
Congratulations on the new house! Homeowner deductions can be tricky with free software, but it's definitely possible.
FreeTaxUSA handles itemized deductions including mortgage interest and property taxes. Their free federal version includes Schedule A, which is what you need for itemizing.
The software will calculate whether itemizing or taking the standard deduction gives you a better result. You just enter your mortgage interest (from Form 1098), property taxes, and any other itemizable expenses, and it does the comparison.
One thing to watch for: some free software might not include all the possible homeowner deductions. For example, mortgage insurance premiums (if you have them) or energy-efficient home improvements might not be covered. FreeTaxUSA seems to have most of them though.
At $65k income, you're right on the edge. The standard deduction for 2025 will be around $15,000 (married) or $7,500 (single). Your mortgage interest plus property taxes would need to exceed that to make itemizing worthwhile.
I bought a house a couple years ago and went through this same search. I ended up using FreeTaxUSA and it worked well for my homeowner deductions.
The key is having all your documents ready:
- Form 1098 from your mortgage company (shows mortgage interest paid)
- Property tax statements from your county
- Any receipts for home improvements that might qualify for deductions
FreeTaxUSA walks you through entering these amounts and then automatically compares itemized vs standard deduction. It even explains which is better for your situation.
One limitation I found: some free software doesn't handle certain state-level homeowner benefits. For example, my state has a property tax credit for homeowners, but FreeTaxUSA didn't include that form. I had to file my state return separately through my state's free filing system.
Don't forget about points if you paid any at closing! Those are deductible too, but a lot of people miss them.
I used Cash App Taxes when I bought my house, and it handled the homeowner deductions fine. The interface for itemized deductions is pretty straightforward - you just enter numbers into different categories.
One thing I appreciated was that it clearly showed me the running total of my itemized deductions compared to the standard deduction. That made it easy to see if itemizing was worth it.
With your $65k income, you might be close. The standard deduction will be higher in 2025 due to inflation adjustments, so make sure you're comparing against the correct numbers. The software should use the right amounts for the tax year you're filing.